The rumours have finally abated, and what was perhaps the raging inevitability of a Microsoft bid for Yahoo is now a reality.

The software giant today offered nearly $45bn for its internet rival. It also emerged that Yahoo rejected an acquisition approach from Microsoft in February last year, believing that its 2007 turnaround plans and the development of its Project Panama search advertising platform would be the basis for the company’s revival.

But when Yahoo announced earlier this week that annual profit was down 12 per cent, Microsoft decided to strike.

Last year, Yahoo was able to convince shareholders that it had a plan in place to deliver the necessary improvement on its stock price. Just 12 months later, those shareholders may be harder to convince when faced with cashing in on a 62 per cent premium on the current share value for Yahoo.

So, chances are the shareholders will say yes. Certainly it would take a very long-term investor to think they are willing to wait for Yahoo shares to increase 62 per cent.

Then it will come down to the regulators. US and European competition authorities will undoubtedly want to examine the deal.

In the US, Google’s planned acquisition of online advertising firm DoubleClick was closely examined by the Federal Trade Commission (FTC), before approving the deal in December last year. Microsoft will be heartened by that decision and will expect it to be seen as something of a precedent.

In Europe, the EU Competition Commission has a long and combative relationship with Microsoft over its dominant position in PC software. The commission has also taken a long, hard look at the DoubleClick acquisition, and many experts expect it to follow the FTC’s example.

So, as Microsoft will undoubtedly argue, if a merger between the world’s biggest pay-per-click internet advertiser and the one of the world’s leading online display advertising firms is acceptable, why would there be a problem with the number two and three search engines getting together?

All Microsoft’s official communications about the Yahoo proposal refer to a “dominant” online search advertising firm. Redmond will argue that combining with its rival will increase competition in the market by offering customers an alternative to Google that can match it more closely in user base and market share.

Google, however, is probably already telling regulators that in a market dominated by three companies, taking one of those out is to the detriment of competition. Remember that opposition to the DoubleClick deal in Europe was led by a Microsoft complaint to the EU. Google will seriously consider returning the compliment.

Microsoft will have a battle on its hands to see the acquisition through, but the deal makes sense all round.

So the fight for the online advertising dollar is well and truly underway. Internet ad spend last year was estimated at $40bn – forecasts suggest it will double to $80bn in 2010. Microsoft wants a bigger share of the pie, and the combination with Yahoo is the obvious way to achieve it.

The question marks that remain will be about how well two companies with very different development cultures can integrate. Yahoo and Microsoft have both been left in the lurch at times by the speed of new web trends and technologies – the success of Google Maps, for example. Will more programmers and more research and development cash be enough to close that innovation gap? It’s a hard task, but don’t bet against it.

But the acid test will be what you do – you, the internet user.

If you use Yahoo because you hate Microsoft, will you be driven into the arms of Google? Yahoo has a huge and loyal user base, every single one of whom is just a click away from becoming a Google customer instead.

When Ford bought Volvo, for example, Volvo drivers were unlikely to sell their cars in protest. But loyalty on the internet is a far more ephemeral thing.

We can expect to see Microsoft vs Google as the head-to-head for the internet era. But the winner will not be decided by advertisers, regulators or developers. It will be decided by you.

I am delighted to announce that our web site, Computing.co.uk, has been relaunched today with a new, easy-to-use design and a range of additional content to make the site your essential guide to business technology.

For nearly 35 years, Computing journalists have brought you the latest news and analysis on UK IT. Now, through Computing.co.uk, we want to make our readers part of the story too, by giving you the opportunity to let us know what you think about the latest trends, issues and technologies.

Today sees the launch of:

Reader Comment – Every news and in-depth article on the site now features a reader comment function that allows you to post your views on the stories that matter to you. Have your say on all the latest developments in IT – and find out what your fellow readers think too.
Visit Computing.co.uk/news

Computing Comment – The most extensive collection of expert blogs in IT. Some of the most influential IT leaders, academics and business groups in the UK bring you their views, along with blogs from the Computing team. Have your say – this is your chance to enter into debate with some of the most senior individuals in IT.
Visit Computing.co.uk/comment

Computing TV – A regular weekly video programme examining the latest trends and technologies, plus exclusive interviews and case studies. You can also watch daily business and science TV news bulletins from Reuters and Associated Press, and attend regular live web seminars examining key IT issues.
Visit Computing.co.uk/audio-video

Computing podcasts – Listen or subscribe to our weekly discussion show, featuring the Computing team examining the issues behind the latest IT news.
Visit Computing.co.uk/audio-video

Computing Community – Meet, discuss, and share your experiences with fellow IT managers and professionals through our exclusive forums. Take part in our Forum of the Week and regular online polls.
Visit Computing.co.uk/community

Knowledge Centres – Everything you need to know about the hot topics in IT, all in one place. Twelve knowledge centres combine all the news, analysis, comment, videos, podcasts, white papers and jobs into one easy-to-find web page.
Visit Computing.co.uk/knowledge

Best of the Web – A round-up of the stories from around the world that have caught our eye. Let us do all the searching for you about news on the latest emerging IT trends.
Visit Computing.co.uk/news

Plus you can still find the same high-quality journalism, breaking stories, exclusive news, insightful analysis and career development advice that you have come to expect from Computing, in print and online.

And in keeping with the spirit of reader feedback that underpins Computing.co.uk, we want to know what you think about the new content and design – please leave your comments on this blog or send an email to feedback@computing.co.uk.

I hope you enjoy the new site.

When Information Commissioner Richard Thomas first coined the expression ‘sleepwalking into a surveillance society’ in an interview in 2004, he probably did not realise he was creating a catchphrase.

The quote has become a byword for the wide belief that technology inevitably means a dangerous loss of privacy.

The privacy debate is a looming crisis, which will have to be publicly tackled soon. Today, there is little rational debate on the subject – only opposing, black-or-white opinions.

Take the recent announcement that the government wants to join up its databases for better information sharing between departments. This is a sensible and much-needed objective, given that a bereaved family currently has to inform up to 44 different departments about a relative’s death, for example.

Yet the plan was initially reported in the national press as a single super database containing everything the public sector knows about us, from police records to council tax payments, with the inevitable allusions to Big Brother.

The privacy debate cannot stay stuck in the past in this way. The internet is changing the game. Personal information is a valuable currency online, with free products and services available in return for registering your details. Among the younger generation it is second nature to provide details to trusted web sites.

There are potentially huge benefits for all of us from better sharing of information, but the use of that data must be controlled. Yet too many privacy campaigners see all such sharing as an intrinsically bad thing, and so the debate never moves forward. Meanwhile, web users continue to trade with their personal data, oblivious to the arguments.

Continuing a 20th century argument means those who embrace the new will be poorly protected. The old privacy campaigners, by their reluctance to accept the potential of technological progress, will simply create an even bigger problem for people enthusiastic for change.

Here is another black-and-white vision of the future to consider. One day, privacy may be a privilege, not a right. The parts of society that can afford the technical security to protect their personal information will trade widely in that data, gaining access to exclusive products and services.

The rest will have no ability to control who has access to it, thereby rendering the data worthless. Will you be part of the elite data rich, or the undervalued data poor?